New York-based hedge fund Taproot Management, founded by David Lin and ex-Two Sigma executive Jason Beverage, has posted losses since its launch last summer, as it attempts to deliver multistrategy-style returns without a traditional PM structure, according to a report by Business Insider.
The report cites unnamed sources familiar with the matter as revealing that firm, which was backed with $250m from the Canadian Pension Plan Investment Board (CPPIB), reported roughly a 1% decline in its first six months of trading, with continued losses into the first two months of 2026.
Taproot’s model relies on a computer-driven platform where experienced analysts feed investment ideas into an algorithm that ultimately executes trades. The approach aims to replicate the steady, diversified returns of multi-strategy managers such as Citadel and Millennium while avoiding the high costs associated with employing a large team of portfolio managers.
The fund has also seen personnel changes, with director of research and partner Kevin Merritt departing in March. His responsibilities have been absorbed by Ted Orenstein, a former investor at SAC, Millennium, and Walleye.
The fund launched amid a difficult period for quantitative strategies. The second half of 2025 was described by insiders as a “long, slow bleed” for quants, and the start of 2026 saw losses at major managers including Renaissance Technologies and Engineers Gate.
Taproot’s structure bears some similarities to centralised alpha-capture platforms used by large funds, including Marshall Wace’s TOPS strategy, though it relies on internal analysts rather than external research. The approach is designed to lower costs while still providing diversified investment exposure, appealing to large institutional investors seeking multistrategy-like returns without the premium fees.
